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Market outlook: Don’t pretend like you didn’t click that ad

Advertiser spend has rebounded, but will Twitter impress the market with its latest set of quarterly results?


Tech stocks run hot, ad spend returns


Tech stocks have continued to rally as advertiser spend returns, with the likes of Facebook, Alphabet, and Snap all reporting robust quarterly results in the last month.


Alphabet – parent company of Google – delivered a standout set of figures as part of its Q4, reporting stellar growth on a massive scale. For the full year the company reported revenues of $182 billion, while fourth quarter ad revenues alone came in at $46 billion.


Commenting more broadly on the ad market, Alphabet’s CFO, Ruth Porat, last week said, ‘we’re encouraged by the increase in consumer online activity and the return of advertiser spend.’


In 120 characters or less


With key ad stocks reporting strong quarterlies in the last month, investor attention this week will likely focus in on Twitter’s fourth quarter results, due out this Tuesday, February 9.


Twitter has been a conduit for significant controversy in the last year, as political tensions flare and users such as Donald Trump were officially ousted from the platform.


In the lead up to Twitter’s upcoming results, analysts have remained mixed on the stock: Piper Sandler initiated coverage on the stock with a Neutral rating, Rosenblatt Securities analysts lowered their price target, while Morgan Stanley boosted their price target though retained an equal weight rating on TWTR.


Investors will likely be keen to see the social media giant maintain the momentum achieved in the prior quarter, after the company reported advertising revenues of $808 million in Q3 – implying a year-over-year growth rate of 13%.


Commenting on TWTR’s upcoming quarterly, analysts from Barclays Capital said:


‘The obvious elephant in the room around forward commentary is the potential engagement drop off in 1Q (usually a seasonally strong quarter for DAU net adds) around the recent account purge’ of controversial accounts, such as Donald Trump’s account.


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